At what point does a new technology cause an existing industry to start losing significant value?

Writing in The New York Review of Books, Bill McKibben reviews two recent papers on climate change. The first is by Kingsmill Bond, a UK financial analyst. It is titled: “2020 Vision: Why You Should See the Fossil Fuel Peak Coming.

The central question Bond asks in his paper is this: “At what point does a new technology cause an existing industry to start losing significant value?”

McKibben says that “this may turn out to be the most important economic and political question of the first half of this century, and the answer might tell us much about our chances of getting through the climate crisis without completely destroying the planet. Based on earlier technological transitions—horses to cars, sails to steam, land lines to cell phones—it seems possible that the fossil fuel industry may begin to weaken much sooner than you’d think.”

He goes on to say: “Major technological transitions often take a while. . . . But the economic effect of those transitions can happen much earlier . . . as soon as it becomes clear to investors that a new technology is accounting for all the growth in a particular sector.”

As I consider the implications of this paper, I see the possibility that investors will be alert to all of this, and will bail out very quickly once the precipitous downward slope of the graph is definitive: they will cut their losses and run. This, along with other climate-related indicators will undermine the confidence of the super-wealthy, prompting them to protect their wealth in ways that create a destructive feedback-loop leading to unprecedented economic disruption and societal collapse. Read more . . .

Global Banks, Led by JPMorgan Chase, Invested $1.9 Trillion in Fossil Fuels Since Paris Climate Pact

A report published on March 20, 2019 names the banks that have played the biggest recent role in funding fossil fuel projects, finding that since 2016, immediately following the Paris Agreement’s adoption, 33 global banks have poured $1.9 trillion into financing climate-changing projects worldwide.

One inescapable finding of this report is that JPMorgan Chase is very clearly the world’s worst banker of climate change,” the report, titled “Banking on Climate Change,” found. “The race was not even close: the $196 billion the bank poured into fossil fuels between 2016 and 2018 is nearly a third higher than the second-worst bank, Wells Fargo.”

“A half-dozen environmental groups — Rainforest Action Network, BankTrack, Sierra Club, Oil Change International, Indigenous Environmental Network, and Honor the Earth — authored the 2019 report, which was endorsed by 160 organizations worldwide. It tracked the financing for 1,800 companies involved in extracting, transporting, burning, or storing fossil fuels or fossil-generated electricity and examined the roles played by banks worldwide.” Read more . . .